Services firms register slowest growth in nearly a year

Employees assist a customer with a computer at a Best Buy in Cary, N.C. The Institute for Supply Management says its services index slipped in July. ﻿

Photo: Gerry Broome, STF

WASHINGTON - U.S. services firms grew last month at the slowest pace since August 2016, a performance consistent with only modest economic growth.

The Institute for Supply Management said Thursday that its services index slipped in July to 53.9 from June's 57.4. It was the lowest reading since the index registered 51.7 in August 2016. Still, anything above 50 signals growth, and American services companies are on a 91-month winning streak.

The index came in lower than economists had expected and below the 55.9 average over the past 12 months. Anthony Nieves, chair of ISM's services survey committee, said the July reading is consistent with overall U.S. economic growth of 1.9 percent a year, a mediocre pace and about what the economy has averaged so far this year. Growth picked up to a 2.6 percent annual pace from April through June after getting off to a slow 1.2 percent start the first three months of 2017.

Still, Nieves said he suspects the slowdown just reflects the summer doldrums.

On Wall Street Thursday, losses for energy and technology companies left most U.S. stocks lower. Smaller companies fared worse as the dollar remained at 15-month lows.

Energy companies weakened as the price of oil turned lower, and tech companies declined as Apple gave up a piece of its big gain from the day before.